How to Write a Business Proposal in 6 Steps

A business proposal is a document used to offer specific goods or services to prospects at a defined cost. They are typically used by B2B companies to win new business and can be either solicited or unsolicited. Effective business proposals have an executive summary, key project details, and require a client signature.

Sending a business proposal is often one of the first stages in the B2B sales pipeline process. Once you’ve learned how to write good business proposals, use a system like Insightly CRM to keep track of deadlines, contacts, and other proposal details. Best of all, Insightly offers a risk free 14-day trial, making it easy to take it for a test drive.

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Free Business Proposal Template

An effective business proposal includes several key elements, including the executive summary, project details, timeline, terms, and cost, as well as a conclusion and signature field for the prospect. Business proposal templates ensure that none of these components are ever missed, making them a vital tool for any sales organization. Visit our article on Free Business Proposal Templates that Win Deals to download a free template in Google Slide or PowerPoint formats.

Here are the six steps to writing a successful business proposal:

1. Gather the Information You Need

When a hot business opportunity becomes available, you may feel pressure to get your proposal sent over as soon as possible. While you certainly want to send it sooner rather than later, taking some time to learn about the client and project first will help you craft a proposal that’s more likely to be accepted. This will inform the key elements to include in your proposal and create a more accurate and effective proposal that results in a closed deal.

For example, if a potential client has multiple offices or locations, you may need to visit more than one of them before you can accurately assess the project. In this scenario, timing requires the right balance: You don’t want to send a proposal prematurely—especially if you can’t accurately estimate costs—but you also don’t want to send it too late and be beaten out by the competition.

Some of the key questions you need to answer before writing your proposal include:

• Who are the buyers? The person you met may not be the final decision-maker. Consider who else may be involved in the process. If possible, ask a prospect to describe their decision-making or approval process.
• What is the pain point? Research your competition to identify potential weaknesses or gaps. Ask the prospect questions about their past experience with similar products or services to identify their pain points and how you can solve it with your offering.
• Is there a budget? Ask the prospect if they have a target price in mind or if there is a budget for the project. Answering this question will help you avoid wasting time on proposals that have no chance for profit.
• Is there a deadline? Many companies set internal deadlines for purchasing decisions in order to hit production or launch schedules. They also may be motivated to buy at certain times of the year. Ask if they have a deadline to help pinpoint the time frame.
• What is your best solution for their problem? Determine which of your offerings provides the most benefit based on who the buyers are, what they need, what their pain points are, and their purchasing schedule.
• What are your costs if the proposal is accepted? Calculate the costs, such as labor or materials, you will incur as a result of your proposal, and estimate the total projected revenue for your company.

One solution is to include caveats. These will allow you to send your proposals quickly while also protecting you from unexpected turns the project may take. However, be careful not to add too many because it can make your proposal appear underdeveloped, which may take you out of the race before you start.

“A simple rule of thumb is to send a proposal after your first meeting. Include a personal note that acts as a follow up: ‘Hey, it was great connecting the other day…,’ and then attach your proposal.”

– Andy Freivogel, Science Retail

Pro Tip: Use a CRM to Stay Organized

CRM systems are used to store and manage your leads and contacts, so it’s the ideal place to manage your proposals as well. In fact, you can incorporate your business proposal into your sales pipeline stages to help you track your proposal activities and move your prospects through the sales cycle.

Sales Process Automation Using Insightly

For example, Insightly, lets you customize your pipelines so they incorporate proposal activities like presentations and modifications. You can store contact information, meeting notes, documents, and emails. It can help you manage sales activities, including proposals, more efficiently than by using spreadsheets. Click here to start using Insightly for free.

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2. Define Project Objectives & Scope

The first thing you want to do before outlining the scope of your project is to define the objective of your business proposal. It’s important that you know and articulate your objective so that you never lose sight of the reason you’re writing the proposal. This helps shape your outline and your proposal. It is also a good practice to state the objective, either in your introduction or in the executive summary of your business proposal.

Know the Objective of Your Business Proposal

To create a proposal objective, ask yourself the following questions:

• What is the purpose of the proposal?
• What are the needs of your prospect or customer?
• What problems are you solving with your products and services?
• How does your solution solve your customer’s or prospect’s problems?

Once you’ve answered these questions, create a proposal objective statement that is centered around your customer’s or prospect’s needs.

Example Objective Statement:

This general objective can be applied in a specific example per the following:

The objective of this business proposal is to demonstrate how Acme Restaurant Group can solve the problem of high event costs and inconsistent guest experiences for Acme Financial Planners by creating a partnership where we host all their dinner presentations in major markets we have locations and they have events.

Outline the Project’s Scope

The scope of the project is the summary of its deliverables and should take features, functions, tasks, costs, and schedule into consideration. This step will define the statement of work (or the “who, what, where, when, how, and why”) as it pertains to your proposal and budgetary costs. While you can answer these questions in your head, the better idea is to write them down as a separate note or record the answers in your CRM before starting your proposal.

To outline the project’s scope, answer the following questions:

• Who: Who will do the work, who will manage the work, and who does the customer call if there is a problem?
• What: What needs to be done or delivered, what will be required to do it, what can the customer expect, and what will it cost them?
• Where: Where will the work be done, and where will it be delivered?
• When: When will you start, when will key milestones be scheduled, when will the project be complete, and when is payment due?
• How: How will work be done, how will it be deployed, how will it be managed, how will you achieve quality assurance and customer satisfaction, how will risks be mitigated, how long will it take, and how will the work benefit the customer?
• Why: Why have you chosen the approaches and alternatives you have selected, and why should the customer select you?

Writing these out will give you a head start, since these answers will make up the bulk of your body. It also gives you final confirmation that you have the necessary resources to complete the project—or it will point out any major snags before you get too invested.

3. Estimate Your Labor & Costs

Early on, you want to consider how much the project will cost—and thus, how much to charge the client. Many businesses use a simple formula to estimate their labor costs: Take a mental walk-through of the project and write down the realistic number of hours it will take for each task. Add all of this up, and multiply it by 1.5.

In other words, if you estimate a project will take 10 hours, write it down as 15 hours in your proposal (10 * 1.5 = 15). Why overestimate? This is because projects often have unexpected twists and turns, and adding this extra time will help account for any potential snags and build in a contingency budget.

Plus, if everything goes smoothly and you wind up below your estimated hours, you can always offer bonus work, or bill your client a lower amount. Both will make for very happy customers.

4. Start Drafting Your Business Proposal

Now it’s time to dive into the actual proposal document. Proposals tend to follow a loose formula. They start with an introduction that summarizes your business and the project, followed by a body that fleshes out all the details (including a pricing table, photos, and charts) and a conclusion that tells the customer how to proceed.

Including the signature page, good business proposals should have between six and seven sections. Delving into this part of your proposal can certainly take a while. However, we have developed a business proposal template you can download to help you get started. That said, if your time is tight, you can always hire a writer to flesh out your proposal or to just give it a final polish.

The six sections you should address in your business proposal include:

Section 1: Introduction

Start by introducing your company and mission in a way that relates to your potential client’s needs. You can include a brief story that gives your client a feel for your brand’s character and helps build trust. Highlight what distinguishes your company, your accomplishments, credentials, and any awards.

The length of your introduction should be a matter of common sense. If you’re proposing a one-day carpet cleaning job, don’t spend more than a few sentences describing your business. If your contract is poised to last several years, however, you’ll probably need to spend more time describing your core business values. Nonetheless, try to always keep it under one page.

Fit Small Business Proposal Template: Introduction

Section 2: Executive Summary

The executive summary is one of the most important sections in your proposal. This is where you should present the case for why you are the right company for the job, and give the reader the takeaway message of the proposal. You should not try to summarize every aspect of the proposal, but rather focus on the conclusions you want the reader to reach after reading it.

Use direct, factual language that is objective and persuasive. This section should be also be kept under one page.

Fit Small Business Proposal Template: Executive Summary

Section 3: Table of Contents (optional)

A table of contents can be helpful for longer proposals with lots of details. List each section (and subsection) with their corresponding page number. In general, we recommend keeping your proposal as short as possible—most proposals shouldn’t need this extra section.

Section 4: Body

Once you have presented your overall case in the Executive Summary, you can outline the specifics of your proposal. This is where you can answer the “who, what, when, where, how, and why” questions that you identified in step two. Include information on scheduling, logistics, and pricing. You can use data charts to illustrate key concepts and can also include testimonials from past clients and a link to your website.

A good way to start is with the project details, including a pricing grid or breakdown of the timeline. A pricing grid itemizes the products or services included in the proposal as well as their price and any terms related to their delivery in an easy-to-read format.

Fit Small Business Proposal Template: Project Details

Fit Small Business Proposal Template: Budget Estimate

You also might want to conclude the body with a signed agreement form that can act as a contract agreement. This is a good tactic for helping to speed the close along.

Fit Small Business Proposal Template: Signed Agreement

Include Your Caveats

The body is also where you include caveats or disclaimers about the type of work you can deliver. This is also known as your terms and conditions, and is one of the most important parts of your business proposal. It is also one of the trickiest arts to master.

It’s a common tendency for clients to expand (knowingly or unknowingly) their requirements once engaged with a provider. For example, let’s say you’re a business hired to set up internet and Wi-Fi. While on the job, you’re also asked to set up their voice-over-internet-protocol (VoIP) phones.

In the moment, this doesn’t seem like a big deal—after all, it’s just a matter of plugging Ethernet cables into the phones. Weeks later, however, you start receiving calls about phones that aren’t working. Unintentionally, you made yourself liable for a system that’s not even your specialty.

To avoid this type of responsibility, you can write caveats—both about the type of work you offer and for your pricing.

Example Caveat

An example of a caveat might be:

“[Your Company Name] will service all technical issues involving [Your Specialties]. We reserve the right to charge extra in the implementation of an issue that is not listed above.”

On the flip side, you don’t want to include so many caveats that your client is scared away. This is where the “art” of how to write a business proposal comes in: include all necessary disclaimers, but word them in a way that still shows the value you’ll bring to a business.

Fit Small Business Proposal Template: Terms

Section 5: Conclusion

Once you have outlined the details of your proposal, re-emphasize the exceptional results your company can provide. You should conclude with a call to action that encourages the reader to contact you or visit your website for more information. Ideally, you want your client to take immediate action on something, even if it is something small.

Fit Small Business Proposal Template: Conclusion

Section 6: Appendix

The Appendix is an optional section that you can use to include information that might not fit well in the body of your proposal. For example, you can include resumes or additional graphs, projections, and customer testimonials.

Pro Tip: Use Custom Fields in Your CRM to Save Important Details

As you write your proposal, you’ll likely keep referring back to old emails and notes to find the “who, what, where, when, and how.” A CRM is a great place to store these important tidbits of information. In particular, custom fields remind you and your employees to collect this information, and make it easily accessible later on.

For example, an IT company needs to track presale owners for their deals to add the presale engineers by name to their proposals and to pay their commissions. By adding these fields to the opportunity in their CRM, the information is easily accessible when it comes time to write a formal proposal and pay commissions.

Custom Field Setup in Insightly

The number of customized fields you can add will depend on the CRM you choose. Insightly offers users the ability to add an unlimited number of custom fields in their Professional and Enterprise plans. Sign up for your free trial today to see how Freshsales can help you better manage the unique requirements of your business.

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5. Edit Your Business Proposal

First and foremost: Proofread your proposal before sending it to a prospect. Whenever possible, send it to somebody else to read over. A second set of eyes can catch errors you may not notice. Many word processing tools allow you to track changes on shared documents, giving you a record of peer comments or suggested corrections. You can always hire a freelance editor to review your proposal.

Second, you need to pay attention to the tone and length of your proposal. In particular, make sure your proposal is short enough to read in a single sitting, and contains language that is professional, yet clear.

Make Use of the Appendix

Any superfluous information, like testimonials, graphs, and charts, can be moved to the appendix. As far as the text itself, keep an eye out for repetition. Rather than emphasize your value proposition again and again, find a single example that drives your point home: “How much do we care about our customers? Our phone line is open 24/7 and we respond to all emails within 30 minutes or less.”

Business Proposal Tone & Language

Make sure you use clear, concise, and simple language that avoids industry jargon and technical terms. At the same time, avoid using hyperbole that exaggerates your company or service (“Our groundbreaking product quadruples sales!”), as this may undermine the trust you are trying to establish with your potential client. In addition, use the same casual-meets-formal tone you would use in their office during a meeting.

There is one exception: Even if you’ve cracked jokes with your potential client, keep humor out of your proposal. This is because you never know who is reading the proposal. Often it gets passed from a business owner to other employees, spouses, and even friends. A joke that lands well with your client may fall flat with somebody else.

6. Send Out Your Business Proposal & Follow Up

In the majority of cases, you can send your proposal via an email attachment. It is best to send it as an attachment rather than within the body of the email to minimize the risk that key details are lost in a long message chain or cut off when printed or forwarded.

However, some businesses may require you to log into their portal and enter your proposal details or submit your proposal’s costs on their supplied forms. In this case, it is still a good practice to email a copy of your business proposal, featuring your letterhead and formatted per your business requirements, to ensure that all terms and conditions are properly captured.

If you’ve written a proposal before, you know the work is hardly over after you click “send.” Following up with a client to give them a reminder and to answer questions is a key part of the proposal process. We have written an article on several different types of follow-up messages you may use as well as example email follow-up templates.

Here are some best practices for sending and following up with a business proposal:

1. Using email tracking software, receive a notification when the recipient opens your message.
2. Follow up the next morning to see if they have any questions.

Email tracking is offered by a number of different programs—including Insightly. With Insightly, emails can be tracked with a click of a button. Simply login to Insightly and head to “Contacts.” Find your potential customer and click on their email address. Write your message (either from scratch or using an email template), attach your proposal, and send.

Email Tracking in Insightly

Waiting for the perfect time to follow up should be a simple, but significant, part of your proposal strategy. A prospect will be far more receptive to a follow-up conversation when your proposal is fresh on their mind—whether they gave it a full read through or just a quick glance. Utilizing email tracking tools, like those offered by Insightly, is another easy step you can take to master the follow-up process. Click here to start using Insightly for free.

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After You Win the Contract

While you might be thinking the challenge ends with a signed contract, this is not exactly the case. As any small business owner can attest, it’s essential to apply the same level of organization to implementation and ongoing support. This means answering questions that come up and executing on the deliverables outlined in your proposal.

Insightly Project Pipeline

Using Insightly, successful sales proposals can be converted into projects. This automatically transfers your custom fields, notes, and documents. Then, follow a new pipeline to deliver the product. In our example of a web design business, the project pipeline stages could include steps like designing, gathering feedback from the client, coding, and debugging.

With an organized system in place, you’ll see many different perks:

• View the status of every project at a single glance
• Know precisely who is responsible for what (and prevent any hold-ups)
• Automatically assign tasks when a project reaches a new stage
• Generate reports to forecast income, measure productivity, and much more

Business Proposal Tips, Formats & Examples

There are many formats you can use to create a business proposal, depending on the needs of your specific business. While our downloadable template is a great way to help you get started, you should update it to include your corporate branding and unique offering and positioning. The format you choose should be designed to capture a buyer’s attention and help your proposal stand out from the competition.

Business Proposal Tips

Here are a few business proposal formatting tips:

• Hire a designer or use professional templates: Business proposals are more professional-looking when you use professionally designed templates or if you hire a designer to create them for you.
• Use callouts for important points: This can be done by using callouts to highlight how your solution solves your customer’s problem.
• Use line items and bullet points: Using line items and bullet points makes your business proposals less text heavy and easier to read. Making your business proposal easier to read increases your odds of it being read and perceived in a more favorable light.

Business Proposal Formats

Another option to consider when thinking about how to write a business proposal is to use a third-party business proposal service. These tools offer additional benefits compared to proposals written with traditional word processors, such as including electronic signatures, tracking notification, and even integrated credit card processing. We have written an article comparing some of the best proposal software for small business.

Examples of business proposals include:

Example Business Proposal #1

Proposify Accounting Business Proposal Template

Example Business Proposal #2

Proposify Website Business Proposal Example

Example Business Proposal #3

Proposify Itemized Service Proposal Example

Example Business Proposal #4

Rocket Lawyer General Contract Example

Frequently Asked Questions (FAQs)

Should I set a deadline within my business proposal?

Generally, no. Unless there’s an actual time limitation, a deadline is just an arbitrary statement. All it does is put pressure on your client to sign the deal quickly. While this was a common sales strategy in the past, many small business owners have veered away from this philosophy today. Deadlines aren’t a great trust builder either, as they reveal your focus is on the contract itself, and not on the client’s needs and long-term well-being.

How long should a business proposal be?

As short as possible. If your recipient can’t read and digest your proposal in a single sitting (about eight minutes), chances are it will go back on their to-do pile, or get forwarded to another employee. Best case, this prolongs the sales process. Worst case, it pulls you out of the running.

What can I do to make my business proposal shorter?

Any superfluous information, like testimonials, graphs, and charts, can be moved to the appendix. As far as the text itself, keep an eye out for repetition. Rather than emphasize your value proposition again and again, find a single example that drives your point home: “How much do we care about our customers? Our phone line is open 24/7 and we respond to all emails within 30 minutes or less.”

What is the difference between a simple & formal business proposal?

A simple business proposal can be either a written or verbal statement that outlines the generic cost of doing business, such as a ballpark estimate. A formal business proposal, also called a request for proposal (RFP), is a document that outlines the very specific needs, scope of work, or manner in which the work will be completed.

What is the difference in approach to solicited vs unsolicited business proposals?

Solicited business proposals are when prospects and customers ask for a proposal. These should be handled by answering questions and addressing points your customer or prospect asks to be addressed in your proposal. Unsolicited business proposals are ones you proactively send without a request and should show that you’ve done your homework and have a solution to a problem your prospect is willing and able to pay to resolve.

How do you develop a business idea?

The best business ideas solve a problem in a way not already addressed in the market. Ask people what complaints they have with existing products, technologies, or services. A new business idea can then either address a specific common pain point directly, or can offer a solution that fills in a perceived gap.

What are key terms to include in my business proposal?

Key terms to include in your sales proposal include price, payment terms, additional recurring expenses like maintenance fees or other indirect costs, potential liabilities, and your cancellation policy, along with the effective date or time period the offer is valid. These terms should be written using clear language to avoid any misinterpretation.

Bottom Line

In terms of how to write a business proposal, the most important thing is to try to think like your client. If you can put yourself in their shoes, you will be better able to explain why your company is the best for the job and anticipate all the questions they may have.

A CRM helps you keep track of your customer’s needs, but can also be a great tool for staying on top of your open proposals. Insightly gives you the ability to manage your contacts, leads, and even the projects resulting from successful deals, all within a single program. Take advantage of Insightly’s free 14-day trial today to see how Insightly can benefit you.

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